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How to Get a Dispensary License in California

How to Get a Dispensary License in California

Welcome to the world of legal recreational marijuana, where business is growing like a weed. That's not just hyperbole. Indeed, the cannabis market is expected to reach a $5.1 billion market value in California in 2019 and could balloon to as much as $32 billion by 2022. Unsurprisingly, since the state legalized recreational cannabis use at the start of this year, savvy business owners have flocked to the Golden State to get a piece of the pie. But with a brand-new industry comes brand-new regulations, and they are certainly aplenty. Surety Bonds Direct is here to help you learn how to get a dispensary license in California, with information on dispensary bonding and more.

What You Need to Get a Dispensary License in California

Besides an entrepreneurial spirit and some knowledge on the topic, there a few key things you need to obtain before you can start a dispensary in California.

  1. Approval from the City or County Government — Don't bother moving onto the next steps if your local government won't give you the go-ahead to deal cannabis. Despite the fact that marijuana cultivation is legal state-wide, the smaller governments are the ones that have ultimate authority on how land and buildings are used. You will need to meet certain conditions and obtain the appropriate land use, building and property permits issued by the local government. Often, these permits are considered sufficient and official approval, but there may be other steps to take as well.
  2. A Marijuana License Bond — Per the California Bureau of Cannabis Control (BCC), no one will be granted a commercial cannabis license without a surety bond of at least $5,000 payable to the state of California. Note that there are specific types of surety bonds for different dispensaries, including separate bonds for adult recreational use and for medical use. You may also be required to have a separate bond requested by your city or county. Some municipalities that require additional bonds are:
    • City of Los Angeles
    • City of Coalinga
    • City of Palm Springs
    • City of Shasta Lake
    • Yolo County
    • San Bernardino County
    • City of Lake Elsinore
    Retailers, cultivators, manufacturers, distributors, testing laboratories and micro-business licensees must obtain the appropriate type of bond before they may be issued a commercial cannabis license for both medical and recreational sales.
    Cannabis Dispensary
  3. A State Cannabis License — Anyone who legally works in marijuana in California has to obtain an official license issued by the Department of Food and Agriculture, the Department of Public Health or the BCC. If you are interested primarily in the sales aspect and won't be cultivating your own marijuana, you will obtain your state license through the BCC. The application process is long and complex, and licensees must provide a diagram of the premises, business formation documents, documentation of finances and other materials pertaining to the business.
  4. Permits and Assessments — As with most industries, certain permits are required to legally operate a dispensary in California. Proprietors may need to obtain land use permits or building permits from the local government as well as certain environmental permits and assessments that help address water use and conservation concerns. Check with your local city or county government to find out which types of permits and assessments are needed for your particular business.
  5. Capital — Last but (definitely) not least is capital. You'll need money to obtain all of these licenses and permits, from the dispensary license cost ($1,000 for the application fee plus a licensing fee that varies based on the value of your business) to fees associated with consulting and building your dispensary from the ground up. Though there's big money to be made, successful dispensary businesses do require large up-front investments that may be secured through venture capitalists, loans, etc.
    Cannabis on display at a dispersary

Playing By the Rules

The California dispensary business is seriously booming, with over 5,000 active cannabis operators in the state, making it the largest marijuana industry in the country. If you're looking to break into this segment, California is a fantastic place to do it. Just make sure that you follow the laws by the book as the industry continues to grow and solidify. Surety Bonds Direct is here to help you with obtaining a California Cannabis surety bond for your cannabis operation so that your business is fully legal and compliant through all the changes.